GRACosway Weekly Wrap Up

9 September 2016

International trade was on the Government’s agenda this week as Prime Minister Malcolm Turnbull travelled to China for the G20 Leaders’ Summit in Hangzhou. Mr Turnbull called on members of the G20 to commit to open markets and free trade, saying continued economic reform is necessary to “hold back rising tides of protectionism”. The Prime Minister also confirmed he is on a “unity ticket” with British Prime Minister Theresa May, who has flagged a post-Brexit free trade deal between Australia and Britain as a priority. The two countries will establish a bilateral Trade Working Group in a bid to fast-track trade negotiations following Britain’s formal exit from the European Union. Discussions about foreign investment and the South China Sea dominated Mr Turnbull’s meeting with Chinese President Xi Jinping, who anticipates the two countries will remain committed to “mutual trust and mutual benefit”.

The Prime Minister also attended the mid-week East Asia Summit in Laos this week, where regional leaders discussed political, economic and security challenges. Mr Turnbull focused on moves to strengthen Australia’s security ties with Singapore, inviting his Singaporean counterpart Lee Hsien Loong to address a joint sitting of the Federal Parliament in October during an official visit where the two countries will seal a $2.25 billion defence deal. Mr Turnbull also announced improved intelligence-sharing with Indonesia to address the threat of foreign fighters – he has offered to host the 10 members of the Association of South East Asian Nations in Australia in 2018 for a special summit focused on security and economic reform. The Prime Minister finishes the week in the Federated States of Micronesia, where he will participate in the Pacific Islands Forum.

Closer to home, political donations remained in the spotlight with Labor Senator Sam Dastyari forced to resign from the Opposition frontbench amid controversy over payments and donations he received from foreign-linked donors. Prime Minister Turnbull has signalled he is open to political donations reform, suggesting the Joint Standing Committee on Electoral Matters inquire into proposed changes, while noting the complexity of the issue raises legal and constitutional questions. Opposition Leader Bill Shortenannounced Labor will propose legislation next week to ban foreign political donations and improve transparency.

National Accounts figures released by the Australian Bureau of Statistics (ABS) on Wednesday confirmed 25 years of uninterrupted annual economic growth in Australia, after the economy grew by 3.3 per cent in the 2015-16 financial year – the best growth figure in four years. Treasurer Scott Morrisonsaid the record was an “extraordinary achievement for the Australian people”, while labelling export growth the “real hero” of the figures. Mr Morrison said net exports growth of 9.6 per cent over the past year represented “the strongest rate of export growth since the Sydney Olympics”.

The Opposition announced it will seek to block the Government’s proposal to extend tax-friendly superannuation contribution arrangements for self-employed Australians, saying the plan is too expensive and will “mostly benefit high-income earners”. The measure is part of the Government’s first tranche of draft superannuation legislation released this week; Labor says the measure will cost $8.7 billion over 10 years. Opposition Small Business and Financial Services spokesperson Senator Katy Gallagher said the Government “should be closing unsustainably generous concessions not opening new ones” and that the measure “cannot be a priority” in the current budget climate. See AFR coverage here (subscription service).

In Victoria, Local Government Minister Natalie Hutchins has signalled the Andrews Government is open to considering council amalgamations in the lead up to the next election – but said changes will need to have the support of the community. Minister Hutchins said discussions about possible council amalgamations and boundary changes had arisen during the Government’s ongoing review of the Local Government Act; the Government has indicated it will consult with ratepayers on the matter. See coverage by The Age here.

Federal Parliament will sit next week, along with all state parliaments (except South Australia and the ACT).